It's a game theory thing. There have been and will be a huge number of sites that would do anything to be #1 on Google.

In an iterated game, punishments must have a deterrent effect. They might seem disproportional, but Google's goal is not "do what's best for the world in this one instance, ignoring the long-term effects". Google's goal is "make sure nobody will try to cheat Google's algorithms, now or in the future." This is how you build the best search engine in the long run.

It would be the same if Google didn't dominate search, though they'd have to be more careful about optimally calibrating the punishment.

(N.B. This argument remains true even if other people are gaming Google right now.)

Well put. Also, maybe RG made things worse for themselves with their "apology", which attempted to point out other misdeeds by competing lyrics sites. Had that argument prevailed, the message sent might have been "it's probably safe to game Google as long as you can find other successful-seeming sites playing the same game", which would be a very bad precedent for Google to be facing.